The net profit of Rs 1,582 crore was way below the market estimates.

The State Bank of India on Friday reported a 37% decline in its net profit for July-September quarter from the same period in 2016. The net profit during this quarter was Rs 1,582 crore, way below a Reuters estimate of Rs 2,696 crore.

The bank attributed the drop in its net profit to higher provisioning for bad loans. The gross non-performing assets of India’s largest lender, as a ratio of total loans, stood at 9.83% as on September 30, a tad lower than the 9.97% on June 30.

Provisions – the amount that banks set aside for loans they believe they cannot retrieve any more – rose 87% year-on-year to Rs 18,418 crore.

Net interest income, the amount that banks earn from interests on loans minus what they give out to depositors as interests, rose 27.3% to Rs 18,586 crore.

Soon after the quarter ended, Rajnish Kumar, who replaced Arundhati Bhattacharya as the chairperson of the state-owned bank, had said sorting bad loans was his top priority.